Listening to a financial analyst talk about investors’ interest in TAM made me think that recruiters need to act like analysts.
TAM stands for Total Addressable Market. This is a measure to understand the market share you have and how much potential there is for your current service or product offering. Investors want to guarantee returns and will invest if you aren’t already selling everything you have to everyone who is interested.
In recruitment I would look at TAM in the opposite way. The bigger your market share of candidates the better opportunity you have of placing the right people. Investors will also want to know how much potential for growth there is in the TAM for clients.
These figures should interest four types of people:
Clients want to know how many people you have on your database, within your network and in your talent-pools that you can call upon.
Candidates want to know that you understand them, their market and that you have the best connections with the clients in that sector.
Demonstrating a good share of the TAM is today’s equivalent of the “warm desk”. Quantifying that you have the biggest talent pool of Xyz professionals in your geographies is a great way to get people to want to work for you.
Investors / buyers
As the economy bounces back more and more acquisitions of recruitment companies are taking place across Europe. Recruitment businesses get bought and sold based on the value of their people, their network, their contractor book, but also their market penetration and ability to connect scarce skills with client opportunities.
By quantifying your market you can begin to structure how you sell and what you spend your time doing. In markets where jobs are slim, but there are a lot of supply of candidates obviously you would re-adress your recruitment activities to focus on finding jobs.
On the flip side where the balance is skewed the other way you would focus your time on growing your network and talent pools of scarce skills.
Quantifying your market place helps you to better negotiate recruitment fees. Knowing how many ideal candidates there are means you can quote fees that you know your efforts are worth. In scarce skills markets it is a seller’s market. With quantifiable data you can qualify your demand as opposed to plucking numbers out of the air.
To help you understand some of your markets and quantify the talent landscape you will need to do some real research, so I recommend starting by using these resources:
LinkedIn Talent Pool Analysis
Once you have collated the data regarding your target audience you can analyse some of the following things:
- How many contacts in your database are within this market?
- How many contacts in your database within this market have been contacted in the last 6 months?
- How many recruiters do you have working on that market and how many calls/emails are they sending daily?
- What is your website traffic from affiliated search terms or to specific pages on your website?
- How many connections do they have on LinkedIn who are relevant?
- How many Followers on LinkedIn does your company have that are relevant?
These six data points will start to paint a picture as to how much of your TAM you actually have.
Your market share in this instance is 0.5%
Knowing that some of the people connected to your employees on LinkedIn, Followers of your business and on your database will be the same it is important to establish a communication strategy across these channels.
In addition to this it is essential to make a plan to increase the percentage of your TAM over time. This may mean finding a way of getting more hits to your website through producing more content, sponsoring content, focusing on search engine optimisation or Google Ad Words, getting more Followers on LinkedIn through targeted advertising campaigns or getting your recruiters to connect with more people.
How do you get better penetration of your relevant TAM?
Whatever your tactics are to grow your penetration – SEO, PPC, advertising, etc. – you need to follow these three steps to make sure that you are making the most of your activities.
“Fish where the fish are”.
Understand the places where these people are hanging out online. This sounds basic but it is so often forgotten. Don’t think what would be easiest or best for you, think what is best for your target audience.
Give them something they want.
Once you have found these people you need to be able to communicate in a way that means something to them. Establish the type of information you can produce or share to pique their interest. Embed your business’ message and core values into the content that you produce so that your audience is building up a preference for your recruitment agency in their mind. Reach outside of your existing network by advertising or sponsoring content.
Make them convert.
You have found where these people are, you’ve given them something and made them aware and interested in you… now you need to make it count! Convert them. Unless you can get their details all you have are ethereal visitors. Profiles, contact details and CVs are what we are aiming for. If you are trying to convert passive people then don’t expect a CV in the first instance, but do create a list of acceptable outcomes that you would want to happen. This list might include things like: obtain email address, phone number, make a Follower with a view to converting them at a later stage, sign up to email newsletter, job application, registration, etc. Once you have your new Followers, connections or your database has grown you can reassess your TAM again. This should be an ongoing process and done again at regular intervals.
Knowledge is power. Understanding your total addressable market gives you the power and confidence to better advise your clients, establish how you should be charging and take stock of your current ability to make placements. Analyse what you have and what you need to be better at what you want to do.
For some more ideas watch this video: Moneyball for Talent Acquisition, from LinkedIn’s James Raybould and Will Hamlin.